Houston Pumps recently reported $222,500 of sales, $140,500 of operating costs other than depreciation, and $9,250 of

Question

Houston Pumps recently reported $222,500 of sales, $140,500 of operating costs other than depreciation, and $9,250 of depreciation. The company had
$35,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus
generate future sales and cash flows, the firm was required to spend $15,250 to buy new fixed assets and to invest $6,850 in net operating working capital.
What was the firm's free cash flow?
O a. $26,517
O b. $27,894
O c. $33,060
O d. $34,438
Oe. $39,948

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